Colon versus separate sentences

They do not hesitate in bending the truth however they see fit to their cause. At times they are rigorous and precise; at times they just play dumb.

versus

They do not hesitate in bending the truth however they see fit to their cause: At times they are rigorous and precise; at times they just play dumb.

1. Am I correct that both the above sentences are acceptable, and the choice boils down to preference?

2. Preference aside, what arguments can be put forward to choose one over another? (For example one can argue that if separate sentences make complete sense it should be preferable because long sentences are harder to read, etc.)

Eventually it is a matter of preference. In your example I would prefer the second version (with the colon), as the two sentences are logically linked.

The first sentence establishes a behaviour (bending the truth), and the second then provides examples for this (being rigorous/playing dumb). Using the colon makes this relationship more explicit. Using a full stop here would signal that the two are not necessarily linked.